Online Gift Supplier Wrapped in Red

RedEnvelope Gifts Online, San Francisco, wants to give its customers something of a red carpet treatment and is banking on a more than $10 million advertising campaign - including a direct mail strategy - to get the word out.

The former 911gifts.com site, which faces strong competition from Gifts.com and Send.com in providing specialized upscale gift merchandise to customers, was relaunched as RedEnvelope Gifts Online in mid-October. The move came after a round of financing in August, which raised $21 million.

"We wanted to be more upscale and get away from the last-minute gift scenario implied by our former name," said Chas Akers, director of database marketing for RedEnvelope. The site's goal is to create an environment of hand-selected merchandise for the customer who doesn't have time to wade through a myriad of online and offline choices for the perfect gift. "We have a team of top-notch merchants who have scoured the world for the best choices." RedEnvelope will even handle commissioning a gift's creation if it can't be found in the market.

More than 100,000 direct mail pieces - a red, tri-fold mailer that features four-color photos of gifts available and a $10 coupon toward a purchase - mailed this week to 911gifts.com's best customers and members of its gift reminder service database. The direct mail is one element of a coordinated advertising campaign via its agency, Leagas Delaney, San Francisco, that includes offline advertising - print and outdoor - as well as online banner ads and e-mail marketing.

A follow-up mailing of the tri-fold piece, along with reproductions of the print ads, will be polybagged in major metropolitan newspapers in 10 cities, including Boston, Chicago, Los Angeles, New York and Seattle, in two waves: one in early December and the second in mid-December via Valassis Communications Inc., Livonia, MI. The polybag approach was taken to avoid mailbox glut. "The major catalogers are filling the mailbox at this time of year, so we want to get in front of our target audience in a more accessible way," Akers said.

Print ads, which point potential customers to the site by providing the URL, www.RedEnvelope.com, will run in December issues of magazines including Details, Elle, Glamour, Men's Journal, Mademoiselle, Martha Stewart Living and Vanity Fair.

E-mail was sent to 911gifts.com customers last week explaining the rebranding. Future e-mail campaigns will target existing members, but the prospecting process will likely be much more gradual, according to Akers. "Right now there are a number of e-mail lists available that don't necessarily have a background in direct mail sold or online sold buyers. They're often prospects at best," he said. "We want to be sure that the market is fully ready for e-mail prospecting and that the guidelines for the DMA's opt-in list is abided by."

Digital Impact, San Mateo, CA, will handle delivery of e-mail to its user base, in both standard text and HTML formats. Banner ad placement and alliances with MSN, Yahoo, E-Greetings, Salon.com and Woman.com also will drive traffic to the site.

Ongoing direct mail and e-mail campaigns will focus on the customer base as well as Gift Alert Reminder Service members, who have specifically signed up to have RedEnvelope prompt them with gift reminders for holidays and special occasions. Purely targeted communications with customers on a one-to-one basis are crucial, according to Akers.

And big plans loom ahead. The company may soon roll out a mail-order catalog to snag gift-givers in the offline world. "We'll be exploring the possibility of a traditional catalog some time next year," Akers said.

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